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Profits rise at H&M

H&M saw pre-tax profits rise 6% to SEK 5.78 billion (£448.5 million) in the second quarter ended May 31, slightly ahead of market expectations.

H&M said that sales excluding VAT over the quarter rose by 23% to SEK 26.5bn (£2bn), which amounted to an 8% increase in local currencies and a like-for-like sales fall of 2%.

Gross margin was impacted to the tune of 1.3 percentage points because of the impact of currency fluctuations. Gross margin was 61% over the quarter.

However, sales in May disappointed, falling 9% on a like-for-like basis, although H&M said that between 4% and 5% of the fall could be attributed to calender effects and pointed out that the month’s figures were up against a 23% rise in sales recorded in May 2008.

Sales for the first half were up 21% to SEK 49.8 (£3.86bn), or 6% in local currencies. Comparable sales fell 3% over the six month period.

Pre-tax profits for the first half fell by 2% to SEK 9.3 bn (£721.2 bn).

H&M opened 93 stores and closed nine stores over the first half. It had 1,822 stores as at May 31.

H&M inked a deal with Jimmy Choo last week, which will see the luxury accessories brand design a collection for the chain this autumn.


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